1. Technical Field
The present invention relates in general to methods for return shipping of goods. Specifically, the present invention relates to methods of doing business that optimize the return of goods under warranty claims, when the good is damaged, the wrong size, or not the good the customer expected, etc. More particularly, the present invention relates to methods of doing business that optimize the return of goods to one or a few sources from a significant number of customers.
2. Background Information
The current global economy is based upon numerous sellers who provide a vast array of goods. Advancements in technological resources and in global marketing have enabled sellers to reach customers throughout the world. Clearly, these sellers require logistical support to deliver their goods to their customers worldwide. The term seller (“Seller”) broadly includes any individual or entity that provides goods, which may include the manufacturer, a wholesaler, a distributor, a dealer or a retailer, and the term customer (“Customer”) broadly includes any individual or entity that receives goods, which may include an intermediate manufacturer, a wholesaler, a distributor, a dealer, a retailer, or any other end customer. Goods include tangible property in any shape, form, or size (“Goods”). The process of “forward logistics” captures the systematic transfer of goods from the seller to the customer. This process may contain a series of steps from one end of the transaction to the other.
For purposes of describing the forward logistics process, the seller is considered the party who currently has the goods, and the customer is the party who will be receiving the goods. These parties may or may not be the “initial” manufacturer or the “end” customer. Rather, the terminology refers to two parties who directly abut one another in the chain of distribution. Any participant in this chain of distribution will employ the services of a transportation company (“carrier”) to deliver the goods from them to the next party in the chain. The chain includes, but is not limited to, manufacturers, wholesalers, distributors, dealers, retailers, and end customers.
The seller is generally a well-established company that employs the services of one or more carriers to move the goods from them to the next participant in the chain. This process is repeated as the goods move through the chain of commerce. The seller and customer have a well defined relationship and the forward logistics process in its most simplistic form takes the following methodology: a seller receives an order from an end customer, packages the order, prepares shipping documentation known as a “bill of lading,” and contacts its preferred carrier who picks up the goods during its scheduled daily coverage of the region where the seller is located. In many instances, this process is automated and software readily tracks the shipment. The current information systems sufficiently track the movement of goods given the limited number of carriers and the close relationships between sellers and their carriers. These current information systems are very desirable to the sellers, carriers and customers as they are generally efficient, accurate, convenient, affective and provide real-time information, and as a result most sellers, carriers and customers would agree that this “forward logistics” system works efficiently and effectively. The seller who is typically paying the freight invoice optimizes the time, size, cost, etc. of the shipment. The seller readily understands the most cost effective, timely and efficient manner of shipping its goods based upon a variety of factors, including: shipment destination, timing, urgency, size of order, etc. In addition, the seller chooses the best shipping method, which may range from a small box to an entire truck and the best shipping mode, which may involve transportation by ground or by air.
However, in some cases the good shipped is the wrong good, size, shape, color, type, kind, etc., the customer merely does not like the good now that the customer has received it, or initially likes and begins using the good but then has a warranty claim, etc. Basically, the customer did not get what they wanted or the customer needs to make a warranty claim, or for any other reason the customer wants to return the good. In any case, the good may have to be returned to the seller. The good must be returned from the customer via some carrier to the seller. This return process is known as “reverse logistics”, and is performed by a reverse logistics provider (“provider”).
The most common “reverse logistics” scenario involves the last participant in the chain that takes part in manufacturing the good or its distributor is the seller, and a dealer or store is the customer. Given the shear volume of “forward logistics” transactions that take place daily, it is common that a small but still material percentage of these shipments will have to be returned by utilizing the “reverse logistics” process.
In a typical reverse logistics process, a customer calls the seller to request a return or reverse shipment. The carrier has no information on the good (unlike the forward logistics movement where the seller and the carrier perform numerous transactions and create a close working relationship), and must obtain the specifics regarding the good to be returned such as size, shape, weight, priority, etc. The provider creates a bill of lading that is typically faxed to the customer (who has already received the good and will be the “shipper” when returning it) and entered into the provider's electronic database who notifies the carrier of the pick up need. Carrier picks up the good during either its scheduled daily coverage of the region where the customer is located or when it is next geographically near the customer (except where an express or priority shipment is requested), and takes it to the provider's warehouse. At the warehouse, the provider will typically (1) validate the good as being the good identified on the bill of lading, and may even compare it to a predetermined good value list the provider has for the seller, (2) inspect the returned good, and (3) enter pertinent information including value of the good and inspection into a warehouse application that is then transmitted to the provider's main office. Information is typically gathered together at the main office and electronically delivered to the seller, who then credits the customer's account.
The “reverse logistics process,” as described thus far, suffers from a number of defects and inefficiencies. First, the verification that the good picked up is the good noted on the bill of lading often does not occur until the good is delivered to the provider's warehouse. Second, verification that the good picked up matches a model number that the seller actually delivered to the customer often does not occur until the good is delivered to the provider's warehouse. Third, a serial number or other form of identification cannot be compared against a master seller list, which is necessary to verify the warranty claim or return, until the good is delivered to the provider's warehouse. Finally, the quantity of that particular good sold to that particular customer in comparison to the quantity of that particular good returned by that particular customer, does not occur until the good is delivered to the provider's warehouse. These examples are merely a sampling of the inherent deficiencies in the current “reverse logistics” process. Clearly, a better solution is needed.